TL;DR
Full Story
The ‘news’ part of this story ain’t that exciting (actually, it’s kinda scary).
Here it is: Crypto exchange, Gemini, just sent out a warning to their users requesting that they monitor their accounts for unusual activity; and confirmed that around 15,000 of their customers might be affected by a data breach of its banking partner.
But this data breach is actually a perfect example of why it’s worth considering using a decentralized exchange (DEX) instead of a centralized exchange (CEX).
Here’s what we’re on about…
Gemini is a CEX which means it’s run by a company and it’s up to the company as to how they operate (which could be good, like Coinbase, or bad, like FTX).
On this occasion, Gemini has been working with a banking partner to let people onboard and offboard their fiat currency.
Allowing people a simple user experience to put dollars on an exchange, which they can then use to buy crypto, is one of the good parts of having such a close integration with a bank.
But the more integrations Gemini have, the more their users are exposed to potential hacks or vulnerabilities (like the 15k customers who may be affected in this one).
What’s the solution?
The solution is to take an approach which combines multiple decentralized experiences which are independent of each other and still provide a good user experience.
For example, you need to get your crypto in your wallet some way, so connecting your fiat bank and your crypto wallet to an onboarding solution like MoonPay is probably necessary.
From there, you could transfer your crypto to a DEX (i.e. a peer-to-peer crypto marketplace).
Et voila! Your crypto is disassociated from any traditional banking system and your identity is safe.
Alright! Now you know.
